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[Economic] [Media]
GameStop was a warning: Elites are weaponizing censorship to keep the outsiders out
by David Sacks
Posted February 4, 2021

The Davos crowd suffers a lossAs the apex predators of capitalism, hedge funds are accustomed to raking in billions by driving companies into the ground and feasting on the carcasses. So there was widespread satisfaction last week when members of an online discussion group called WallStreetBets started beating the Wall Street bully boys at their own game. Ringleaders of the group noticed that hedge funds had taken a short position in the videogame retailer GameStop that far exceeded the number of shares available to trade.

Motivated as much by revenge as by profit, these influencers in the group encouraged the 2.7 million members (since risen to around 8 million) to purchase the stock in order to drive the price higher and create a massive short squeeze. This quickly became a movement with a cause similar to that of Occupy Wall Street, except much more effective because it hit the intended target where they would feel it the most, in the wallet. “The only way to beat a rigged game,” one WallStreetBets leader said, “is to rig it even harder.”

As a massively decentralized online group of scrappy outsiders, the only tools at WallStreetBets’ disposal were online trading and social networking. Both were frozen at the crucial moment, and the hedge fund insiders were let off the hook. The weaponization of censorship is a big part of the reason why. More…